The CEO of UK testing and localisation firm Keywords Studios says its acquisition of Babel Media could be the first of a number of buyouts.
Earlier today, the company revealed it had acquired outsourcing services provider Babel for £5m, and would be paying off the company’s debts and injecting new investment into it.
Speaking to Develop, Keywords CEO Andrew Day says up until now the game testing market had been too fragmented, and the firm is looking to become a big global player in the testing and localisation space.
"The supply side of the market for these games services, localisation and testing, is very, very fragmented," says Day.
"And on the other hand our clients tend to be multi-billion dollar global organisations, and to expect them to go shopping from small suppliers in various territories is a bit rich. I think it’s much more interesting for them to have one or two big global players that can support their needs across all geographies."
Last year Keywords floated on the London AIM (Alternative Investment Market), with a market cap of £49m. Day says that the company went public so it could pursue its ambitions to become the biggest provider of testing and localisation services in the world.
The acquisition of Babel, which he says is the most well known testing services provider in the industry, means Keywords has now expanded its global presence to countries such as India, where Babel already has a sizeable operation in place.
"When we floated Keywords on the stock exchange back in June, it was very much with this sort of thing in mind," he says.
"So we’ve been growing our business organically very strongly over the last three or four years. And we really wanted to take a leadership role in some industry consolidation through acquisition, and that was the main driver behind the flotation of the company. So this is one acquisition of a few that will happen over the course of the next couple of years or so."
In fact, being so well known, Day says he is keen for Babel to keep its name in the near and long-term, rather than renaming it to a Keywords subsidiary. As he points out, "Babel is a much better known name than Keywords".
But despite being so recognisable in the industry, the acquisition has highlighted over £3m worth of debt at Babel, which Keywords is looking to wipe out from the off. Day admits there had been a "cash squeeze" at Babel in recent times, but was confident it had the right staff and a good client base to add to and compliment Keywords’ own offerings.
Moving forward, Day says it’s business as usual for the two companies, but now with extra investment needed to make Babel stronger and the services to expand Keywords’ offerings as a whole.
"We’re going to be investing across the board in all of Babel’s activities; functional testing, localisation testing, audio and translation, and obviously working together across the other Keywords locations to make sure we get the best fit for customers’ requirements," he says.